Cash Flow: 5 Things to Know Before Using a Credit Card This Summer

Let your money work for you by maximizing points or cash back options.

If you’re traveling this summer, you might be whipping out a credit card. A recent study by Nerdwallet.com points out an important fact: All cards aren’t created equal. Whether spending on flights, hotel fees or dining out, most folks are dropping at least a few extra hundred dollars this season. While using the card that’s attached to your bank is a no-brainer, other brands may actually give you better rewards. Switching companies is business, not personal. Here are some things to consider before making a choice.

1 What’s Your Current Card’s Reward Structure?

Cash may be king, but other options that may be more attractive based on your habits. For example, if you’re a frequent flyer, a card that amps up the miles rewards is more advantageous. Consider how points earned from money spent can best serve you and look for cards that offer stronger perks in that category.

2 What’s Your Interest Rate?

According to Credit Karma, the average APR (annual percentage rate) on credit cards was 12.54 percent in 2017. This is when your credit score really matters. Typically, the higher your score, the lower your card’s APR. Ultimately, it’s up to you to advocate for yourself. Review your current card’s APR and compare it to a few others. APR’s are negotiable, so call your current company to determine whether they can beat the better offers before you change.

3 What Are Your Card’s Fees?

Cards that offer more perks, such as increased access to customer service reps, fraud protection, and high credit limits, often come with annual fees. The flat rate varies based on several factors, such as the brand and access to capital allotted. Consider whether the perks are worth the yearly bill, which will be automatically deducted.

4 What’s The Difference Between Credit v. Charge Cards?

The summer is a great time to consider using a charge card. Credit cards allow you to pay off balances over a period of time, while charge cards require that you pay the entire balance in full at the end of each month. Charge cards, like a traditional American Express card, are an ideal way to alleviate the burden of carrying cash or using your debit card while traveling. They also keep you honest since whatever you spend must be paid in a billing cycle.

Looking to get a credit card that better serves your travel needs? Here are a few of NerdWallet.com’s top credit card picks.